Why are we calling this a convention... Isn't this a standard? A framework? A measurement approach?
There are already many great frameworks, standards and measurement approaches in use – by a wide variety of industries and disciplines. This project is not developing another speciﬁc framework, nor a standard that would require everyone to adhere to every element, nor a single or standardized measurement approach.
A convention is “a general agreement about basic principles or procedures”. This convention describes consensus on principles and procedures for sharing our impact expectations with each other, which can act as a foundation for positioning and linking to different frameworks, standards and measurement approaches.
The convention will recognize that different perspectives will place more or less emphasis on different procedures and therefore position frameworks, standards and measurement approaches accordingly.
How are the expectations of those who lives are impacted shaping this project?
Workshops with a wide variety of customers and beneficiaries have been held across all continents. These workshops are facilitated by local partners who have been particularly thoughtful about the voices of customers and beneficiaries, the importance of their role in governance and the power dynamics guiding efforts of this kind. Findings from these workshops will all be made publicly available. Read more about the findings here.
What is impact?
We heard consensus that impact is the material effect(s) experienced by people and planet.
Effects are material if they:
- relate to important positive or negative outcomes (what),
- are significant, in terms of scale and/or depth and/or duration (how much)
- and occur for groups of people and/or the planet who are not already well-served in relation to the outcome (who).
When deciding if and how to manage the material effects we are having, we also consider whether we make the effects better or worse than what the market does anyway (contribution), as well as the likelihood that those effects are different from our expectation (risk).
We need information about all five dimensions of impact in order to benchmark performance.
Is there a correct “order” to the dimensions?
There is no correct order, and we have seen people work through the dimensions in a variety of ways. Who, what and how much can only be understood in relation to each other. If you put who first, you may start by thinking about a set of stakeholders that are always relevant. If you put what first, you may start by thinking about the outcomes for which you are having a significant effect as an enterprise, and then explore who those outcomes are occurring for. We’d love to hear what order you prefer!
Are impact goals the same as targets?
No. A goal as an aim or desired result. Some people use the terms ‘objectives’ or ‘investment criteria’ for the same purpose. We set goals against each dimension of impact.
We can then select indicators that help us to manage performance against our goals. A target allows us to be specific about the level of performance expected against the indicator(s).
Like goals, targets can be re-set as new information improves our understanding of what is achievable.
Are intentions the same as impact goals?
Our intentions express a commitment to act in a certain way – typically derived from our value and motivations. So, they inform our impact goals (and financial goals), but no – they are not equivalent to them.
We do not necessarily need to communicate our intentions widely: they may be publicly shared or privately held, clearly articulated or less well-understood. However, we do need to communicate our impact goals with others in our value chain in order to practice impact management effectively.
As we learn about the needs and experience of people and planet and improve our impact, we may need to change our goals, which might in turn affect our intentions.
Who is the ‘who’ when setting goals?
When setting goals, the ‘who’ can be a group of people, the planet, a community, a place, or a system you seek to change.
Impact management requires us, where possible, to manage all material effects on all people and the planet, rather than just singling out any one effect on a group of people or the planet (such as the recipient of the product or service).
When describing all those materially affected under the ‘who’ dimension, we also use the most appropriate demographic or geographic descriptors to help us understand how underserved the people or planet we affect are in relation to that particular outcome.
Is impact risk the same as ESG risk?
ESG risk analysis considers which negative effects are likely to occur for people and planet because of an enterprise’s operations. But given that investors with different intentions and goals might invest in the same enterprise, an effect may be bracketed under ‘ESG’ for one investor but not for another.
So practically speaking, it is easier for enterprises to manage their impact if they just have one dashboard of data that summarises all material positive and negative effects on people and planet – without any of these labels.
Impact risk is the likelihood that impact will differ from our expectations – and that that difference will be material from the perspective of either the people or the planet who experience impact (or not).
There are a number of impact risk factors that help us assess the likelihood of impact not occurring as expected, such as evidence risk and unexpected impact risk.
Is contribution the same as additionality?
Yes, in the sense that both terms refer to the extent to which an enterprise’s effect (or an investor’s actions) makes a difference to what is likely to occur anyway.
This dimension matters because we cannot be creating impact – i.e. having a material positive effect on the world – unless what we are doing is better than what would have happened anyway.
With the five dimensions of impact, the contribution dimension considers whether the effect delivered by an enterprise (across the what, how much and who) is better – or worse – than what would likely have occurred anywhere.
Investors or funders will also need to consider which of four broad strategies they can use to contribute to the impact of the enterprises they back.
Do I need to manage my ‘indirect’ impact?
We aim to manage all of an enterprise’s material effects on people and planet, regardless of whether they are generated directly or indirectly – e.g. by its products or services, its distribution network, its operations or its supply chain.
For example, a small business may not set a goal to manage an effect occurring in their supply chain, because their contribution to that effect is small. Conversely, a large business might have the ability to make the effects of that supply chain much better, and so would set goals to manage them.
I get that this is a collaborative, multi-stakeholder effort - but really, who are you?
The Impact Management Project is truly the voices of hundreds of practitioners, so the coordinating team prefers to stay behind the scenes!
But in the spirit of transparency, the people who spend their days geeking out on impact management include (in alphabetical order) – Clara Barby, Amanda Feldman, Aine Kelly, Olivia Prentice and Brian Trelstad. Hat tip for helping find consensus in Phase 1 also goes to Amy Croome and Stefanie Kneer.
More importantly, get in touch with our Advisors, Contributing Authors and Partners who make all of this a reality everyday.